Italy’s Ferrero may rethink India investment plans

Inordinate delays in approvals from the country’s food authority could lead the $11-billion Ferrero Group...

Inordinate delays in approvals from the country’s food authority could lead the $11-billion Ferrero Group to rethink investing a fresh tranche of R500 crore in India. Ferrero India has already invested R500 crore and wants to double it to R1,000 crore. India was supposed to the Asia hub and the Indian plant had in fact started exporting to China. But delays in approvals in India and a red carpet welcome in China has made the Ferrero Group work on a new plant in China, said ambassador (retired) and Ferrero India secretary-general Inder Chopra. He is concerned about the possibility of this additional investment being diverted to China. It is tough to ‘make in India’ without the right support and environment, Chopra said, adding that delays in approvals from the Food Safety and Standards Authority of India (FSSAI) have held up fresh product launches and expansion of its portfolio.

“Three to four products have been pending for more than a year,” Chopra said, adding that “they are not regulating, they are strangulating us”. The Food Safety and Standards Act, under which the FSSAI has been created, says in the preamble that the Act is being passed to help the nascent food processing industry, given its employment and export potential, but that is not what is happening, Chopra said. “If there is no industry, what will you regulate,” he asked. The company needs approval if they have to launch any food product beyond the 330 products for which standards are laid out.

And this is not just a Ferrero problem, but a challenge for all the big and small food product makers in the country, he added. As the industry on the whole is suffering, there was a CEO-level meeting in August 2014 with the secretaries of the ministries of food processing and health to highlight these issues. Some companies have taken legal recourse and it has reached the Supreme Court.

Ferrero India has its headquarters in Pune and its plant at Baramati, which employs 3,000 people, majority of them women.